The New Conversation: taking Social Media from talk to action pptx

This promise is why nearly two-thirds of the 2,100 companies who participated in a recent survey by Harvard Business Review Analytic Services said they are either currently using social

the New Conversation:

taking Social Media from talk to actionSponsored by

Copyright © 2010 Harvard Business School Publishing All rights reserved

“Conventional marketing wisdom long held that a dissatisfied customer tells ten people But…in the new age of social media, he or she has the tools

to tell ten million.”

paul Gillin, author of The New Influencers

Executive Summary

and YouTube, offers organizations the chance to join a conversation with millions of customers

around the globe every day

This promise is why nearly two-thirds of the 2,100 companies who participated in a recent survey

by Harvard Business Review Analytic Services said they are either currently using social media

channels or have social media plans in the works But many still say social media is an experiment,

as they try to understand how to best use the different channels, gauge their effectiveness, and

integrate social media into their strategy

Despite the vast potential social media brings, many companies seem focused on social media

activity primarily as a one-way promotional channel, and have yet to capitalize on the ability to

not only listen to, but analyze, consumer conversations and turn the information into insights

that impact the bottom line

For instance:

π

π Three-quarters (75%) of the companies in the survey said they did not

know where their most valuable customers were talking about them

π A fraction (7%) of participating companies are able to integrate social media

into their marketing activities

While still searching for best practice and measurements, two-thirds of the companies surveyed

are convinced their use of social media will grow, and many anticipate investing more in it next

year, even as spending in traditional media declines

Only a small group — 12 percent — of the companies in the survey said they felt they were

currently effective users of social media These were the companies most likely to deploy

multiple channels, use metrics, have a strategy for social media use, and integrate their social

media into their overall marketing operations

Clearly, most companies are still searching for the best practices and metrics so they can

under-stand where to invest and target their social media activities and build their own competitive

advantage It will take those new tools and strategies to create what Avinash Kaushik, Google’s

Analytics Evangelist, describes as a new reality in harnessing the power of social media

“Too many companies have not evolved from what I call ‘shout marketing’ — think TV,

newspapers, magazine ads — to influence by initiating and participating in conversations

with consumers,” he said “There needs to be a generational shift.”

The emergence of Internet-based social media has started a new kind of conversation among consumers and companies, challenging traditional ideas about marketing and brand management while creating new opportunities for organizations to understand customers and connect with them instantly.

The proliferation of social media channels is mind-boggling Publishing tools like TypePad and WordPress offer any company or customer the chance to write a blog, while microblogging on Twitter allows a rapid-fire stream of real-time commentary, complaints, and recommendations Social networking sites like Facebook and LinkedIn bring together friends, fans, and detractors, while wikis and social news sites like Delicious and Digg quickly move links and ideas around the Web Customers planning a vacation,

a meal, or a haircut can turn to customer review sites like Trip Advisor and Yelp Meanwhile, on multimedia sites like YouTube, companies can post promotional clips, while disgruntled consumers can capture scenes of poor service or damaged products on their iPhones and quickly upload the video.The growth in use of these channels is equally astounding Twitter reached a benchmark of 50 million tweets this year Facebook has over 500 million worldwide users, and based on current growth rates, projects one billion total users by 2011 The average amount of time spent on social networking sites increased 82% last year And it is not just a phenomenon among the young: according to

Forrester research, a third of adults post at least once a week to social networking sites such as Facebook and Twitter, and about 70% read blogs and tweets, and watch YouTube

Never before have companies had the opportunity to talk to millions of customers, send out messages, get fast feedback, and experiment with offers at relatively low costs And never before have millions of consumers had the ability to talk to each other, criticizing or recommending products — without the knowledge or input from a company “Conventional marketing wisdom long held that a dissatisfied customer tells ten people But…in the new age of social media, he or she has the tools to tell ten million.”

says Paul Gillin, author of The New Influencers

It is that power that companies are seeking ways to harness, as social media has moved from the margins

to the mainstream; according to a new survey by Harvard Business Review Analytic Services, more than three-quarters (79% ) of the 2,100 organizations surveyed said they are either currently using social media channels (58%) or preparing to launch social media initiatives (21%)

the New Conversation:

taking Social Media from talk to actionfull report

The use of social media by our organization will grow

significantly over the next few years

The use of social media by our organization is a tactical

rather than strategic decisionUsing social media is integral to our overall company

goals and strategySocial media has been designated as a high priority by

our organization’s executives

It is difficult to see the value of social media for

business purposesSocial media tools are not very relevant for our business

The use of social media for business purposes

is a passing fad

Our organization has a significant learning curve to

overcome before we can utilize social media

Interest in utilizing social media is growing rapidly

within our organization Until we are able to clearly measure the impact of social

media, it will not be taken seriously in our organization

Social media is an important component of our

overall marketing strategy

attitudes Toward social media Figure 1

Question: please indicate the extent to which you agree with each of the following statements about social media in your organization?

But the majority of these companies also said they were still struggling with how to best use the different

channels, gauge their effectiveness, and integrate social media into their strategies Two-thirds of users

have no formalized social media strategy in place Sixty-one percent reported a significant learning curve

before they can truly utilize social media Many companies reported they are still searching to find the

best way to demonstrate the impact of social media and the contribution to the bottom line (Figure 1)

Many organizations seem to operate under old paradigms, viewing social media as one-way flow

marketing messages, instead of capitalizing on the opportunity to monitor, analyze, and participate in

the millions of conversations between consumers

For instance, while more than half are using social media, only about one-quarter of users said they

could identify where their most valuable customers are “talking” about them And, less than one-quarter

(23%) are using any form of social media analytic tools, with only 5% using some form of customer

sentiment analysis

Only a handful of users (7%) said they are able to integrate social media into their overall marketing strategy, such as campaign management, retail analytics, CRM and business intelligence

Without such information and integration, companies are missing the chance to effectively market products, find new opportunity and manage their reputation, says leading author and analytics expert Tom Davenport

“Without monitoring conversations on the Web, you won’t know who’s talking about your brand and your products or services, and what the positive and negative sentiments are about them,” says Davenport

“You won’t know how influential a particular praising or criticizing customer is You won’t be able to compare different brand messages, commercial videos, etc and see what the quick reaction is to them

In short, you’re missing a lot of marketing opportunity.”

In the survey, there was a small group of companies — just 12% — who described themselves as effective users This group comprised a kind of “best practices” segment They were much more likely to be fully-leveraging the benefits of social media by using multiple social media channels to reach customers, learn about customers, research new products, and establish user groups among customers This group was also far more likely than others to integrate their social media monitoring solution with their other marketing solutions

Given these findings, it is not surprising that for many companies the most pressing challenges with social media are in understanding the potential to make a difference in their business, measuring its effectiveness, and aligning social media activities to an impact on company financials (Figure 2)

Yet without good metrics and tangible evidence of impact, the majority of the executives in the survey said their organizations cannot take social media efforts seriously And that poses a challenge for companies,

says Avinash Kaushik, Google’s Analytics Evangelist and author of Web Analytics 2.0, because social

media can build up a great deal of data, but not necessarily generate great insights that translate into action and then more customers and sales

Counting clicks and tweets and postings is nice, he says, but, “our bosses care about something far more simple — what has the Web done for me today?”

“Without monitoring conversations

on the Web, you won’t know who’s talking about your brand, your products, or your services…”

Understanding the potential of social media to make a

difference in your business

Educating your staff on how to use social media

Integrating social media analytics into your

broader company analyticsLeveraging social media insights across your organization

Systemizing sharing of social media insights so they

are quickly addressed by relevant department

Responding to findings from social media (i.e., quickly

resolving/addressing an issue raised via social media)

Capturing/analyzing online conversations about

your brand products/services Finding qualified staff who can work on social media activities

Measuring the effectiveness of social media activities

Linking social media activities to an impact on company

financials and/or ROIImproving your ability to fully utilize social media

within the organizationGetting people across the organization to see the value

of social media activities

most pressing current challengesFigure 2

Question: Which of the following are the three most pressing challenges that your organization currently faces (or anticipate you’ll face)

with regard to social media? (Select up to three)

The currenT user View: experimenTing To find a sTraTegy

For many companies, social media use is still viewed as an experiment, where discrete projects are

launched, usually by a few individuals in marketing or communications Some said they limit their

activities because they are in a “test” mode and lack resources to do more Others said the organizations

are wary because they perceive dangers in exposure and lack of control of the conversation on the Web

“Social media is a big ocean and we are pulling in a little bay where we are more protected,” said a global

partner in a health and benefits consulting company

Among companies currently using social media in the survey, half said the main benefit of their activity

was increasing awareness of the organization and its products and services among target customers

Twenty-six percent said social media usage lead to more favorable perceptions of the organization,

products, or services Another 30% see an increase in traffic to their website as a prime benefit, but only

29% report collecting and tracking customer reviews on their website or other websites (Figure 3)

It was striking that more accountable benefits were far lower down the list

Social networks

Don’t know

BlogsMultimedia sharingMicroblogs (e.g., Twitter)Review sites/discussion forums

current usage of social media Figure 4

Question: Is your organization using any of the following media channels? (Check all that apply)

Increased awareness of our organization, products,

or services among target customers

Better understanding of customer perceptions of our brand

Improved insights about our target marketIdentification of positive/negative comments

Increase in new businessIdentification of new product or service opportunities

Have not derived any benefits at this pointAbility to measure the frequency of discussion

about our organizationEarly warning of potential product or service issues

Increased traffic to websiteMore favorable perceptions of our organization,

products, or servicesAbility to monitor what is being said about our organization

Development of targeted marketing activities

primary BenefitsFigure 3

Question: What have been the three primary benefits that use of social media has brought to your organization?

While 23% said social media did give them some ability to monitor what was being said, only 9% said

that the ability to measure the frequency of discussion about the organization was a current benefit and

only 18% said they were able to identify positive and negative comments

In short, many organizations’ activities seem more focused on “making noise” about their company and

products, and less on understanding and participating in the conversations already going on about them

on the Web

Among all companies, social networking sites were the most popular form of social media, with the

majority (87%) using sites like Facebook More than half (58%) reported using blogs or multimedia

sharing Fifty-three percent use microblogs (Figure 4)

The most common combinations of channels are blogs, social networking sites, and either multimedia

sharing sites like YouTube, or microblogs (Figure 5)

Some examples:

π

π A mid-sized U.S industrial supply company uses a blog to comment on business issues, which

reporters follow, while also using Facebook, LinkedIn, and Twitter to reach customers The company

monitors customers’ and analysts’ comments to take a proactive approach in responding “If we

reach out and respond to someone who makes a comment about us in a social media channel, it

makes a huge impact,” says the director of customer experience “We know that people are out in

social media channels seeking information and researching We need to use social media to

influence their buying behavior.”

number of channels/Technologies used Figure 5

Question: Is your organization using any of the following media channels? (Check all that apply)



The average organization is utilizing three different social media channels

The most common combinations are:

ππ blogs + social network + multimedia sharing (36%)

πππblogs + social network + microblogs (35%)

“We know that people are out in social media channels seeking information and researching We need to use social media to influence their buying behavior.”

π

π A major publishing and training company uses social media for recruitment by posting interviews

of employees on YouTube: “It gets a lot of attention and it is an easy, inexpensive way of getting the message out about the kind of company we are,” says the director of communications The company also uses Twitter and Facebook for marketing and generating PR about new books and other products, and has launched internal blogs to keep employees connected to each other

π

π A large U.S.–based industrial production management company launched a blog to gain more visibility for its experts who install and optimize products in plants The program has now expanded to include LinkedIn, Facebook, and Twitter Email exchanges between experts and customers with problems are regularly posted in the social media channels “Right now there is a lot of expertise trapped in mail boxes and folders and it’s not visible,” says the chief blogger “Marketing brochures are not the language customers use Social media lets the experts escape the prim and proper marketing talk.”

is used to screen blogs “Sometimes, you find little jewels of insight It can also be a warning system

if anything is growing into an uproar,” says the vice president of corporate development “Speed is important too Social media tells you whether people like a TV commercial without waiting for their buying behaviors to show you.”

Both small and large companies reported some form of social media use, like those described above Smaller organizations more often described social media as an opportunity for increasing awareness, Web traffic, and new business Larger organizations were more likely to see social media in terms of tools that help them monitor perceptions and identify positive and negative comments

Social media use was most often reported in the education (72%), communications (71%), services (66%), and retail/wholesale (61%) sectors The least active were energy and utility companies (41%), manufacturing companies (32%), and government organizations (27%) (Figure 6)

adoption of social mediaFigure 6

Question:Which of the following indicates how your organization is using social media in any way for business purposes?

by social media, we mean Web based channels and technologies such as Facebook, twitter, blogs, youtube, discussion forums,

online communities, etc

MR/customer insights

CommunicationsPublic relationsWeb teamSalesIT

social media responsibilityFigure 7

Question: Which areas of your organization are responsible for the development of your organization’s social media strategy?

(Check all that apply)

One-quarter of the respondents said they do not use social media and have no plans to do so “Investors and customers are not using social media to find out about us,” said a vice president of investor relations

at a multinational packaging firm “We don’t interact directly with consumers, we go through business channels We are very sensitive about any part of the company that interacts with the public.”

Within user organizations, the marketing department plays a key role with social media efforts most likely to be directed by the marketing department (69%), followed by the communications, PR, and Web teams (Figure 7)

Just 20% of social media users have a dedicated budget for their social media activities, with marketing controlling that budget in almost half the companies

About a quarter of the users outsource some social media activities to public relations agencies or others Only a handful of organizations (12%) have dedicated staffs who work only on social media: the rest said that social media is only “part of the job” for employees in areas like marketing, PR, and communications Overall, half (49%) have up to one full-time equivalent working on social media

This reflects just how experimental many organizations view social media and how they have been reluctant to commit resources, perhaps because they are still not certain of its goals, effectiveness, and impact on the organization

“At the C-suite level, they don’t want to talk about social media because they don’t understand it,” said the vice president for strategy at a multinational construction company “If we don’t get education out about the benefits of social media and get business people to adopt it, it could put us at a serious disadvantage.”